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Automating supply chains and logistics

Did you know, T&L businesses have more untapped automation value than most other businesses?

Supply chain: “A supply chain is a network between a company and its suppliers to produce and distribute a specific product to the final buyer” [1]

Logistics: “the overall process of managing how resources are acquired, stored, and transported to their final destination” [2]

McKinsey Global Institute estimates that the transportation-and-warehousing industry has the third-highest automation potential of any sector [3]. Out of the top 10 challenges of Logistics Fleetroot has suggested, there are 8 that Robotic Process Automation (RPA) and Intelligent Automation (IA) can immediately address, with low start-up costs and fast ROI (potentially seeing financial savings and non-financial benefits in-year)

  1. Reducing transportation costs
  2. Improving Business Processes
  3. Enhancing Customer Service
  4. Improving Supply Chain Visibility
  5. Supply Chain Finance
  6. workforce Shortage
  7. Government Regulations
  8. Technology Advancements

Let’s look at the 3 key themes here where RPA could be applied to ease a lot of the pain being experienced in your industry now and are likely to continue in the near future

1. Reducing transportation costs

Fleetroot estimates that 30-50% of logistics expenses are transportation, this is a considerably large problem that was made much worse in 2020, however this also means that there are significant savings that can be gain through automation in this area.

Working for a Utilities company many years ago, we used a customised Fleet management system that calculated the most cost-efficient routes for each of the hundreds of national driver to make each day, this system recalculated in real-time and update drivers of their schedule. In the continuous improvement team, we analysed details down to the amount of equipment held in each van and the type of fuel drivers were using to find opportunities for further cost savings.

However, one key thing seemed to be missing for both our analysis team and the management system, access to the full data picture. Many of the legacy systems did not speak to each other, so it was difficult for our team to gain access to the data we needed, and it seemed to me that the fleet management also had the same handicap

With the introduction of RPA, systems can exchange data, automated processes can better monitor back-office activities and data is much easier to retrieve. With better data analysis leaders are able to identify different behaviours and bottlenecks leading to re-engineering processes so that they are more efficient, more user friendly and can encourage more positive behavioural shifts.

2. Visibility, transparency

Looking back at my time at Lockheed Martin, one of the world’s largest systems integrators, it is apparent that Robotics, automation, and AI have been in logistics for a very long time. However in the dawn of Robotic process automation and intelligent automation, automation can be extended passed just physical robotics, and process automation is now more versatile and easier to implement.

Even today, there are logistics companies that rely on huge, intricate spreadsheets to manually manage costs and other data. 47% of supply chain executives still rely on Excel, with almost 70% of companies using Excel for supply chain management

In additional, data throughout the supply chain is typically fragmented so there is no single source of truth, allowing more innovative and wide-spreading companies to overtake a large piece of that space.

Through RPA, collecting and sharing data and information through automated processes will give leaders more visibility and control on what is going on under the hood and thus reduces risk. This means better forecasting of demand, reducing lead times, reducing the silos internally from department to department as well as externally between supplier and customer.

3. Labour shortage, customer service and process efficiency

We are all feeling the sting of 2020 due to the China-US trade wars, Brexit, and Covid-19, which will inevitably continue to hurt business throughout 2021

As we see huge shifts in the economy and key industries from the ‘old-way’, Governance and regulations has become turbulent. Our businesses will need to quickly adapt, re-adapt and build in these new business and compliance rules into their processes

Augmenting staff may be the best way forward as they can become more efficient, accurate and productive. Even if on the surface some business processes may not yield significant financial benefits, if automating them can maintain compliance then there is a cost avoidance saving.

In addition, by providing your staff with digital assistance, monotonous and repetitive takes can be handed over to your ‘digital workforce’ allowing your staff to focus on more value-adding tasks like customer service, or research and analysis to continuously improve your services, potentially find new services to offer, which previously weren’t possible or viable options

So what actually is Robotic Process Automation, and how is it used?

Robotic process automation (RPA) is an extremely versatile software platform which allows businesses to quickly build automated processes by mimicking the clicks and keystrokes of staff for specific processes and tasks. It can only work on digitised processes that do not require any human intuitive, as an RPA robot can only make logic-based decisions. RPA is most suitable for high volume, repetitive tasks

Here are just a few ‘Quick win’ logistics processes that are suitable for automation [5]:

  1. Scheduling and Tracking
  2. Order and Inventory Tracking
  3. Invoicing and Credit Collections
  4. Supply and Demand Planning
  5. Purchase Order Management
  6. Freight Management
  7. Returns and Refunds

Get started now – as “the future is already here”

If you can appreciate the urgency for getting familiar with RPA and IA, the first step is to educate your organisation, from the top down so that senior leaders are aware of and understand how to use intelligent automation (robotic automation and Artificial intelligence) to get tangible value.

But a step frequently missed is to also educate from the bottom up. Change will only work well when everyone is on board as anyone in RPA has learnt. The teams have access to the data and understand the processes, and will who will support the implementation process and will eventually own the automated solutions, not the IT or Automation team. “Emwpowered teams transform businesses”.

Find your Proof of Concept process – discover your quick wins, those easy to automate, back office processes that can deliver significant savings this year. Use a methodology like AEIO YOU® to use your business data to fish them out, and start building momentum

Automate strategically. Gone is (well should be) the time for tactical automation. Automating processes here and there wastes time, is less cost efficient and slows progression (see our webinar Proactive vs Passive).

Time really is of the essence and we just don’t have time for it anymore, as “The future is already here – it’s just not evenly distributed.” – William Gibson

Tony writes for the Digital Transformation network, educating businesses in using new cutting-edge technologies.

To learn more about using Process automation and other technologies, check out the AEIO YOU® Portal, a one-stop centre of excellence enablement platform for getting value from RPA and IA – speak to your local AEIO YOU® partner to learn more